Justia Arkansas Supreme Court Opinion Summaries

Articles Posted in Consumer Law
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The Supreme Court affirmed the circuit court's order granting judgment on the pleadings and dismissing Appellants' cause of action against the Kroger Company, holding that the circuit court did not abuse its discretion in granting judgment on the pleadings.In their complaint, Appellants alleged that Kroger had violated Ark. Code Ann. 4-75-501(a)(2) through its Kroger Plus Card policies and procedures. Thereafter, the General Assembly passed a bill that was signed into law (Act 850) that defined that parameters of section 4-75-501 in a way that was not previously set forth in the statute. Kroger moved for judgment on the pleadings, which the circuit court granted. The Supreme Court affirmed, holding (1) Act 850 cannot be given retroactive application; (2) the circuit court did not abuse its discretion by applying the "functional availability" doctrine in dismissing the complaint; and (3) the absence of any factual allegation regarding the mens rea was fatal to this cause of action. View "Rhodes v. The Kroger Co." on Justia Law

Posted in: Consumer Law
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The Supreme Court reversed the order of the circuit court granting class certification for a group of Appellants’ customers, including Appellees. The class definition included all who “owe or will incur debts” springing from business with Appellants. On appeal, Appellants argued that certification was improper because no class was “ascertainable” under Ark. R. Civ. P. 23. The Supreme Court agreed, holding that the class as defined was not ascertainable as a threshold matter, and therefore, the circuit court abused its discretion by proceeding to a Rule 23 analysis and granting certification. The court remanded the case with instructions to decertify the class. View "Arch Street Pawn Shop LLC v. Gunn" on Justia Law

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CACH, LLC filed a complaint against William Echols alleging that Echols breached his contract with a bank when he defaulted on his obligation to pay for charges incurred on a credit card and that, as current owner of the account, CACH was entitled to payment of the balance due on the credit card. Echols filed a class action counterclaim alleging that CACH violated the Arkansas Deceptive Trade Practices Act and the common law when it demanded payment from and filed suit against Echols and other Arkansas residents. The circuit court entered an order granting class certification. The Supreme Court affirmed, holding that the circuit court did not err in granting class certification. View "CACH, LLC v. Echols" on Justia Law

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Ashley Hartness entered into an oral agreement with Restoration Plus, which was owned by Rick Nuckles, for the restoration of his 1968 Pontiac Firebird. Dissatisfied with the restoration, Hartness filed suit against Nuckles, alleging breach of express warranty, breach of implied warranty, money had and received (unjust enrichment), conversion, fraud, deceit, and false representation. The circuit court entered judgment for Nuckles, finding that Hartness failed to comply with the notice requirement of the Uniform Commercial Code (UCC), which requires a party bringing suit on a warranty to notify the breaching party before filing suit. The court also rejected the remaining claims. The Supreme Court affirmed, holding (1) if breach of warranty claims exist for a contract that is exclusively for services, the UCC notice requirements apply, and the circuit court did not err in ruling that Hartness’s claims for breach of warranty failed for lack of notice; and (2) the circuit court did not err in ruling that Hartness could not recover for unjust enrichment or conversion. View "Hartness v. Nuckles" on Justia Law

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McHughes Law Firm filed a lawsuit on behalf of Precision Analytics, Inc., McHughes’ client, against Lillie McMullen asserting that McMullen was responsible for a consumer debt incurred on a credit card issued to her ex-husband. After that lawsuit was dismissed, McMullen filed a complaint against McHughes, alleging that McHughes violated the Arkansas Fair Debt Collection Practices Act and the federal Fair Debt Collection Practices Act, and that McHughes invaded her privacy and engaged in malicious prosecution while attempting to collect on the consumer debt owned by Precision. The circuit court dismissed the complaint. The Supreme Court affirmed, holding that McMullen’s complaint failed to meet the pleading requirements of Ark. R. Civ. P. 8(a)(1) and that McMullen failed to allege facts to establish various elements of her state-law claims. View "McMullen v. McHughes Law Firm" on Justia Law

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Appellee, Peter Rosenow, brought a class-action complaint individually and on behalf of similarly situated persons against Appellants, Alltel Corporation and Alltel Communications, Inc. (collectively, Alltel), alleging violations of the Arkansas Deceptive Trade Practices Act and unjust enrichment arising from Alltel’s imposition of an early termination fee on its cellular-phone customers. Alltel filed a motion seeking to compel arbitration based on an arbitration clause contained in its “Terms and Conditions.” The circuit court denied the motion, concluding that Alltel’s arbitration provision lacked mutuality. The Supreme Court affirmed, holding that the circuit court did not err in finding that a lack of mutuality rendered the instant arbitration agreement invalid.View "Alltel Corp. v. Rosenow" on Justia Law

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Cavalry SPV I, LLC (Cavalry) purchased Patty Simpson’s delinquent credit card account and retained the McHughes Law Firm (McHughes) to collect on the delinquent account. McHughes, on behalf of Cavalry, commenced an action seeking to collect the debt, and a default judgment was entered against Simpson. Simpson then sued Cavalry, alleging state and federal claims. As grounds for her claims Simpson asserted that Cavalry was not licensed in Arkansas as a debt collector. The action was removed to federal court. Cavalry moved for summary judgment, asserting that it was not required to be licensed because it did not attempt to collect delinquent accounts or bills but, rather, hired a licensed Arkansas lawyer to collect on delinquent accounts and file lawsuits on its behalf. The Supreme Court accepted certification of two questions of law and answered (1) an entity that purchases delinquent accounts and then retains a licensed Arkansas lawyer to collect on the delinquent accounts and file lawsuits on its behalf meets the definition of “collection agency” pursuant to Ark. Code Ann. 17-24-101; and (2) an entity, such as Cavalry, that purchases and attempts to collect delinquent accounts must be licensed by the Arkansas State Board of Collection Agencies.View "Simpson v. Cavalry SPV I, LLC" on Justia Law

Posted in: Consumer Law
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Appellant was in the business of extending high-risk loans to customers with poor credit ratings and operated primarily in Louisiana. Appellees, who resided in Arkansas, obtained four loans from Appellant at its location in Louisiana. After Appellees failed to make payments on the loans, Appellant filed in an Arkansas circuit court a notice of default and intention to sell Appellees' home. Appellees asserted the defenses of usury, unconscionability, esoppel, unclean hands, predatory lending practices, and a violation of the Arkansas Deceptive Trade Practices Act. The circuit court found that the loans constituted predatory lending by a foreign corporation not authorized to do business in Arkansas and that the contract between the parties was unconscionable and could not be given full faith and credit. The Supreme Court affirmed, holding (1) the circuit court's findings of unconscionability and predatory lending practices were not clearly erroneous; and (2) court did not err in refusing to enforce the mortgage, as to do so would contravene the public policy of the State of Arkansas. View "Gulfco of La. Inc. v. Brantley" on Justia Law

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State Farm filed a complaint for negligence against Appellant, alleging that Appellant was at fault in an automobile accident with State Farm's insured. Appellant counterclaimed, alleging that State Farm was unjustly enriched as a result of having engaged in the deceptive and unlawful business practice of causing collection-style letters to be mailed in an attempt to collect unadjudicated, potential subrogation claims as debts. Appellant's counterclaim identified two putative classes. State Farm filed a motion to strike the class allegations. Rather than granting the motion to strike class allegations, the circuit court denied class certification "for the reasons stated in State Farm's motion." The Supreme Court reversed, holding that the circuit court acted without due consideration of the Court's foregoing case law on typicality, commonality, and predominance and therefore abused its discretion in prematurely denying class certification at the early pleading stage of this case. Remanded. View "Kersten v. State Farm Mut. Auto. Ins. Co." on Justia Law

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Appellant requested her medical records from a medical clinic. Pursuant to its contract with Appellant's medical care provider, Healthport, Inc., a private company that fulfills such requests for medical records, obtained and sold Appellant the copies of her requested medical records. Healthport collected sales tax on charges for services rendered in retrieving and copying the medical records. Appellant subsequently filed a class-action complaint against Healthport for violation of the Arkansas Deceptive Trade Practices Act (ADTPA), unjust enrichment, and a declaratory judgment that Healthport illegally collected the sales tax. Healthport impleaded the Arkansas Department of Finance and Administration (DF&A) by filing a counterclaim and a third-party complaint seeking declaratory judgment on whether the State's tax statutes require the collection of sales tax on labor and copy charges associated with the production of medical records. The circuit court granted Healthport's and DF&A's motions for summary judgment, finding that sales tax applied to the sale of copies of medical records and that this conclusion rendered Appellant's additional claims moot. The Supreme Court dismissed Appellant's appeal without prejudice for lack of a proper Ark. R. Civ. P. 54(b) certificate, as the circuit court's Rule 54(b) certificate failed to comply with Rule 54(b). View "Holbrook v. Healthport, Inc." on Justia Law